Financial Statement Project: Montana Furniture Design

Use the attached financial statements to answer the following questions. Please be sure to read and adhere to the additional guidance listed on the following page. 1. Calculate gross profit as a percentage of sales for each year 2018-2020. This percentage represents how much of total revenue the business still has after paying for costs of goods sold. What does the change in gross profit from year to year say about this business 2. Since this business makes and sells furniture, access to materials is paramount. As you might already know the price of lumber has changed significantly over the last couple of years. What would you expect to see on the financials as a reflection of the price changes in lumber? Does this business financial data line up with the changes you were expecting? (This question will require you to research lumber costs data on the internet - you do not need to site your source) 3. The owner of Montana Furniture Design is worried about the economy. Specifically she knows that it has become more difficult to buy and receive materials quickly. In order to avoid future issues, she's decided to buy materials of about $1,000,000 at the end of the year (2021) to keep in inventory for next year's production. Wil this impact her net income for 2021? If so, howa Montana Furniture Design Profit and Loss January 2018 - December 2020 JAN-DEC 2018 $2,276,200.04 Income JAN. DEC 2019 $2,018,919.33 JAN - DEC 2020 $2,544,841.58 Cost of Goods Sold Cost of Goods Sold Labor & wages Materials Other costs Shipping Wholesale items Total Cost of Goods Sold GROSS PROFIT 535,388.50 358,432.76 17,572.46 120,887.26 369,990.57 $1,402,271.64 $873,928.40 487,623.68 380,220.99 24,162.06 116,725.88 305,975.62 $1,314,708.22 $704,211.11 537,451.37 512,163.80 17,390.32 137,198.74 364,227.35 $1,568,431.58 $976,410.00 Expenses Charitable contributions Fees & subscriptions Marketing Meals and Entertainment Office expenses & utilities Payroll expenses administration Property taxes Reference materials Repair & Maintenance Salaries & wages Supplies & small tools HAR Internet 27,181.75 13,944.88 14,803.36 1,301.94 8,186.70 5,491.70 2.353.90 40,520.25 12,656.21 28,961.30 700.52 22,029.10 42,285.00 16,440.78 30,472.83 1,926.62 19,368.75 1,027.64 2,479,04 49.95 17,400.04 250,031.63 5,719.65 5902 69 9,733.46 225,935.42 5,568.83 5.077-83 2.408.13 12 25 19,141,09 228,873.71 4,634.71 3782.59 27,181.75 13,944.88 14,803.36 1,301.4 8,188.70 5,401.70 2,353.90 40,520.26 12,656.21 28,961.90 700.52 22,029.10 Expenses Charitable contributions Fees & subscriptions Marketing Meals and Entertainment Office expenses & utilities Payroll expenses - administration Property taxes Reference materials Repair & Maintenance Salaries & wages Supplies & small tools Telephone & internet Travel Total Expenses NET OPERATING INCOME Other Income Other Expenses NET OTHER INCOME 9,733.46 225,835.42 5,568,83 5,077.83 8,657.06 $328,236.83 $545,891.57 $56.08 $0.00 $56.08 $545,747.65 2,408.13 17.25 19,141.09 228,873.71 4.634.71 3.782.59 11 214.06 $374,938.92 $329,272.19 $52.15 $0.00 $52.15 $329,324,34 42.285.00 18,440.78 30.472.83 1,826.62 19,368.75 1,027.64 2,479.04 49.95 17,400.04 250,031.63 5,719.65 5,902.69 12,855.67 $405,960,39 $570,449.61 $171.00 $58.48 $112.52 $570,562.13 NET INCOME Montana Furniture Design Balance Sheet 2018 through 2020 JAN - DEC 2018 JAN - DEC 2019 UAN - DEC 2020 29.210.44 5.00 6,066,58 $35,282.02 75, 266.59 5.27 0.00 $75,271.86 60.118.13 72 271.10 0.00 $132,389.23 ASSETS Current Assets Bank Accounts Checking Savings Petty Cash Total Bank Accounts Accounts Receivable Accounts Receivable Total Accounts Receivable Other Current Assets Total Current Assets Fixed Assets Accumulated depreciation Equipment Improvements Roof Building addition Total Fixed Assets 39.695.00 $39,695.00 $17.681.69 $92,658.71 37,890.29 $37,890.29 $0.00 $113,162.15 212,066.58 $212,066.58 $24,476.40 $368,932.21 -227,052.00 256 308.00 30.870.00 27.450.13 $87,576.13 $612,601.00 $792,835.84 239 224.00 262,447.00 5.300.40 30,870,00 27 450.13 $86,843.53 $588,791.00 $788,796.68 -243 369.00 262,447.00 5,300.40 30.870.00 27.450.13 $82,698.53 $294,153.00 $745,783.74 Inventory TOTAL ASSETS 30,870.00 27,450.13 $87,578.13 $612,601.00 $792,835.84 5,300.40 30,870.00 27,450.13 $86,843.53 $588,701.00 $788,796.68 5,300.40 30,870.00 27,450.13 $82,898.59 $294,153.00 $745,783.74 Improvements Roof Building addition Total Fixed Assets Inventory TOTAL ASSETS LIABILITIES AND EQUITY Liabilities Current Liabilities Accounts Payable Accounts Payable Total Accounts Payable Credit Cards Line of Credit Total Current Labilities Long-Term Liabilities Total Ulabilities Equity TOTAL LIABILITIES AND EQUITY 0.00 $0.00 $-6,021.46 $60,000.00 $53,978.54 $0.00 $53,978.54 $738,857.30 $792,835.84 35.772.72 $35,772.72 $7,819.82 $0.00 $43,592,54 $0.00 $43,592.54 $745,204.14 $788.796.68 0.00 $0.00 $27,723.07 $0.00 $27,723.07 $112,170.40 $139,893.47 $605,890.27 $745,783.74